COLA 1.4%; Medicare Premium Jumps 8.7%

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COLA 1.4%; Medicare Premium Jumps 8.7%

Seniors will receive a meager 1.4% Cost-of-Living Adjustment (COLA) in January while Medicare premiums are increasing a hefty 8.7%. The annual COLA increase is close to record low levels. In only two previous years, 1987 and 1999, has there been a lower COLA—when it was 1.3%. On the other hand, deductions for Medicare premiums will increase $4.70 per month to $58.70.

Average Retiree Will Net $8.30 Month Increase
After deducting the monthly increase of $4.70 for the Medicare premium, the average retiree will have only $8.30 more per month to cover supplemental health insurance premiums and prescription drug cost increases. Industry surveys, however, expect these costs will increase by about 17%. TSCL is concerned that many seniors will either give up certain necessities to afford their health care, or turn to loans and credit cards.

TSCL will continue to press for legislation that would provide fairer COLAs in 2003.

Source: Social Security Administration, October 18, 2002.

For more details, see “While Health Care Costs Soar, Expect Low COLAs Next January” at http://www.tscl.org/NewContent/101621.asp.

December 2002